Question

A dealer in Jaipur supplies a TV worth ₹10,000 to a dealer in Udaipur. The dealer in Udaipur supplies the same TV to a dealer in Delhi at a profit of ₹6,000. Assuming that the dealer in Delhi is the end-user of the product and the rate of GST is 12%, find:

(ii) Output tax for the dealer in Udaipur

[1 Mark]

• A. ₹600
• B. ₹1,200
• C. ₹960
• D. ₹1,920

Answer 1

The correct option is D ₹1,920

CP for the dealer in Udaipur
$=₹10,000$
$\text{Profit}=₹6,000$
SP for the dealer in Udaipur
$=₹10,000+₹6,000=₹16,000$

Now, the TV is supplied from Udaipur to Delhi. Thus, it is a case of inter-state transaction.
$IGST=12\%\text{of}₹16,000=₹1,920$
$\Rightarrow$ Output tax for the dealer in Udaipur
$=₹1,920$